Picking the best cellphone contract for your pocket

SIKI MGABADELI:  It’s call-in Friday, so today we are focusing on cellphone contract packages – how to ensure that you get the best deal possible. There are so many to choose from, I get confused. If you asked me right now what my package is, I could not tell you. I just know how much I pay. But I don’t know what it is and I’m probably not using it properly, so this will be beneficial to me as well.

We are going to addressing a number of issues. If you’d like to call us, the number is 011-731-8500. Also tweet us @moneywebradio or @sikimgabadeli.

Joining me now is Cherise Stein, who is with Tariffic. Cherise, thanks so much for your time today.

CHERISE STEIN:  It’s good to be here again. I love coming in and chatting on what’s happening in the market. You know, a lot’s been happening in the market, and I must say you are not alone when it comes to trying to understand what’s happening with your cellphone spend, and what’s going on in the markets.

SIKI MGABADELI:  I think firstly, with whom we get into contracts themselves, anecdotally when I speak to a lot of people and when we chat about contracts, I get the sense that people are moving to prepaid. Are contracts still popular?

CHERISE STEIN:  It’s an interesting question. We get it a lot too. I think it’s about what you feel comfortable with. When it comes to a contract you know every month you are going to have a certain amount of megabytes, minutes and SMSes – even though they are redundant. The service providers seem to tell you that you will get an unlimited number of them; then once that’s used up you go out of bundle.

There is the convenience factor when it comes to a contract, but it’s not necessarily always right because you don’t know what the right contract is for your usage. I’m going to touch on that now, and why you should use Tariffic.

When it comes to prepaid you can control your spend. So you can say, okay, I’m going to top up R500 and I know that once it’s used up there isn’t going to be that bill shock at month end.

SIKI MGABADELI:  Okay. I stick to a contract purely because I know I will forget to load airtime and I don’t ever want to run out. It’s pure laziness on my part. That’s it.

CHERISE STEIN:  You are not alone. I’m also on a contract. We get busy.

SIKI MGABADELI:  Okay, what questions should you ask, then, for yourself?

CHERISE STEIN:  Well, it’s very difficult to ask yourself a question in terms of what’s my usage. I’m going to ask you the question: how much do you use? Do you know?

SIKI MGABADELI:  I have no idea.

CHERISE STEIN:  Most South Africans don’t know. So what we’ve done, and what we’ve been doing for the past six years now, is we’ve been helping South Africans understand their spend.

How do we do that? We take your itemised bill, we upload it into our incredible system. We actually call it Magic, because it is magic. We build up a profile. That profile says this is how many minutes you use, this is when you use them. We take every second of the day into account – this is when you are using your data. That profile isn’t just based on one month. You can give us six months’ worth of data and we build this beautiful picture.

Then we take your own personal picture, your usage profile, and we compare it against every single package and bundle available in South Africa.

SIKI MGABADELI:  How many are available?

CHERISE STEIN:  Oh, my gosh. There are at times in excess of 10 000 different package and bundles. And when I say package and bundles you get a package and you add a data bundle, then you add an SMS bundle. Now on MTN you can have a voice bundle.

SIKI MGABADELI:  So that’s a combination.

CHERISE STEIN:  How is any South African mean to choose? I’ve been in this industry for ten, 12 years and I can’t do it. It’s difficult, it’s really difficult. So we have this incredible tool. It’s available for consumers online, free of charge. You literally go to our website, www.tariffic.com, upload your bills or estimate your usage. We make it simple.

Let’s say you don’t have a bill, or you don’t know when you last received a bill, go to our website or phone us. That’s the consumer model. We do it for businesses too. So you can imagine that if a consumer, one person, can’t do it, how is a company with 100 cellphone contracts or 50, or 1 000 meant to do it?

SIKI MGABADELI:  We are going to take a call before we continue. Thembi in Soweto – hi, Thembi.

THEMBI:  Hi, Siki. I’m actually glad you guys are having this conversation today because I’ve had a problem with my service provider. In September I was charged R15 000 for data usage alone, and that’s in one month. I allegedly used up all this data.

The next month I was charged R10 000 again. And when I took it up with the service provider I was told that I was on Facebook. I don’t even have a Facebook account. They just gave me a run-around, and I still haven’t got a response from them until today. I went physically to the Vodacom in Midrand and I still don’t have any answers from them. So I’m at a loss as to what to do. Right now they’ve actually suspended my account because they say I owe that money.

SIKI MGABADELI:  How much do you typically use, Thembi? On average.

THEMBI:  On a average, because data is so expensive in South Africa, I can honestly say in a month perhaps I use R500 worth of data. When I was on contract it was an unlimited contract, I think. But my thing also is why did no one tell me that I had used up, say, R5 000 in the first week? With banks they tell you if there is a suspicious activity on your account, so why is it not so with the providers?

SIKI MGABADELI:  Thembi, can you stay on the line? We are going to get your contact details. This is obviously a specific issue, but it does affect a lot of people. That’s Thembi. We are going to deal with it now. A lot of people complain about this, and it just becomes this massive shock.

CHERISE STEIN:  It is. It’s a reality in the South African market that out-of-bundle spend, especially with smartphones today, is really scary. I’m going to use the word “scary” because you have a smartphone, you have no idea what’s going on with your usage, because you might be downloading something and you don’t realise its size, or you might be uploading or upgrading or updating an app.

SIKI MGABADELI:  These phones just decide to update themselves all the time.

CHERISE STEIN:  You didn’t realise it was updating and you weren’t in a Wi-Fi zone – and it just starts chewing all of your data and you land up with a bill in excess of R10 000 and R15 000. The caller is not alone. We get calls on a daily basis saying “Please can you help me?”

It’s not available for consumers yet, but it is available for corporates – we’ve got a new real-time notifications tool, which allows us to notify the corporate in real time on MTN and Vodacom what is actually happening with their employee’s spend to avoid this exact problem, because we found that in the corporate space employees at times were abusing – there was improper usage. They might not have realised or didn’t realise they we doing it.

So we actually tune in to Vodacom. Every ten minutes you will be alerted of what’s happening with a specific employee’s usage – whether you’ve got one line, ten lines or a 1 000 lines. And on MTN too. So we are trying to help South Africans prevent bill shock. The service providers aren’t accommodating. It’s not necessarily in their best interests to let you know.

SIKI MGABADELI:  To tell you that, hey, this is not normal!

CHERISE STEIN:  Vodacom generally sends you an SMS that you’ve exceeded your bundle, but today when you receive SMSes, at times you receive so many marketing messages that you don’t actually notice it, and it doesn’t always come through. And you don’t always get an SMS.

So yes, it is their responsibility to let you know. If your spend has been on average R500 a month and suddenly it’s sitting at R2 000, [they should] block it and call up the customer, chat to the person. It really is scary.

SIKI MGABADELI:  It’s all dealing with the things you must consider when you are getting into a contract.

CHERISE STEIN:  Yes. What you really need to look at is right now is that the market is quite competitive, and Telkom is very, very competitive when it comes to voice and data.

SIKI MGABADELI:  I see a lot of people switching.

CHERISE STEIN:  Cell C too. We’ve just run analysis – we’ve got a tracker that we release quarterly, and we’ve looked at what’s happened over the last two years in the market, and what consumers could potentially save or would have saved if they were on the right contract. So if they’d listened to Tariffic’s recommendation two years ago, they would have saved on average over the period 40%.

If that person now decides to go ahead and they want to look at what is available on the market again, and they use our service, they would save a further 18%.

So if you look at that, it’s just kind of rounded out. You could save up to 50% by going to Tariffic’s website, estimating your usage, uploading your billing, and we will tell you what’s right for you, based on the network of your choice. We will tell you Vodacom, MTN, Call C or  Telkom – who’s been the most competitive. Like I just said, Cell C and Telkom, especially on voice. MTN has come the party over the past years when they introduced the My MTNChoice+ packages, and those packages are showing a saving of around 33%.

So, how to choose, understand your usage. If you don’t understand it, go to Tariffic’s website and we’ll help you. Or phone us 0861-000-820. It’s very difficult to do it on your own.

SIKI MGABADELI:  Ja. But on Cell C and Telkom, for example, are there still coverage issues?

CHERISE STEIN:  Cell C have improved. I was actually at a client yesterday who said just that. They haven’t been experiencing as many issues, where the call is like a drop. They are both working at it. Vodacom and MTN have been in the market for 20-plus years…

SIKI MGABADELI:  And they’ve spent a lot of money on infrastructure.

CHERISE STEIN:  That’s it. Telkom are piggy-backing on MTN. You will feel a hard drop – a hard drop means the call will actually drop and you move from a Telkom tower to an MTN tower; they call it a hard drop, not a soft drop. It’s there.

But people are more concerned at the moment about savings, really, at the bottom line. So they are kind of forsaking for the fact that connectivity is not where they would like it to be, because there is a potential 50% saving on their cellphone bill.

And corporates – the same thing is happening within the corporate space. Tariffic is preventing bill shock because of our real-time notification.

SIKI MGABADELI:  So that people know what’s happening. What happens at upgrading time? What should one think about?

CHERISE STEIN:  The same. The service provider is going to call you and try and sell you a handset. And generally the only time you hear from your service provider is when you are due for an upgrade.

SIKI MGABADELI:  That’s true.

CHERISE STEIN:  I say it’s actually a coup. Vodacom, MTN and Cell C and Telkom have a marketing coup. It’s incredible what they’ve done, where they drive the handset. The handset kind of drives the purchase – iPhones, Samsungs. Before you upgrade and go and pick your phone, because you are going to want the latest phone, understand the package that’s right for you, because you don’t have to go and get an iPhone with Red VIP on Vodacom because that’s the cheapest when it comes to the handset.

SIKI MGABADELI:  What’s a Red VIP?

CHERISE STEIN:  We can actually talk around that now, because you used to say a Talk 1000 and you knew there were 1 000 minutes in the Talk 1 000. The Red VIP is Vodacom’s so-called “unlimited” package, and they no longer use the minutes reference in the name of the package. So you’ve a Smart XL or a Smart L, or a Red VIP – that’s Vodacom’s unlimited package.

SIKI MGABADELI:  Are you still limited, though, in terms of if you want to get this latest phone, you have to be tied to this cellphone package?

CHERISE STEIN:  No. And that’s what I’m trying to communicate here. Pick your phone, go to your Vodashop, let’s say, for example – or your Telkom, because they are far cheaper, or your Cell C because there is also a cost-saving there. Take your Tariffic report with you because we have told you what the right package is, and say “I want the Pinnacle 3 with this phone”. They are probably going to say, “Take the Pinnacle 3” – that’s the Cell C package – “with this phone”, or “Take the Pinnacle 5 with this phone”. You must say to them: “No, I don’t want the Pinnacle 5 with this phone, I want the Pinnacle 3 with this phone.” Why? “Because Tariffic has said to me this is the best package for me based on how I’ve used my phone” over the past, let’s say, six to eight months, or the past 24 months or the past month.

So it’s about picking the package and then picking the phone, not picking the phone and then the package, because you are mismatched and you will find yourself out of bundle and you will find yourself in a position just like our caller, where there is bill shock – although she was referring to the service provider not letting her know.

SIKI MGABADELI:  In terms of getting out of your contract, let’s talk a little about that.

CHERISE STEIN:  Getting out of your contract – they make is very difficult. They all have different calculations. If you go to our website, we actually have a blog and in the blog it tells you what the calculation is for each service provider, and how much you would potentially have to pay to cancel. So you can’t get out of your 24-month contract without paying a penalty. A lot of the time it’s the handset fee that you are paying. But they are called “free” handsets. There is no such thing in South Africa as a free phone.

Just please, if I am going to communicate anything, make sure that you are picking the right package before you pick your phone. If you want to save money use Tariffic, because we’ll help you do all three. You’ll see the cellphone options on our website, you will input your own usage and we will recommend the right package for you, putting money in your pocket.

SIKI MGABADELI:  We’ll leave it there. Thanks for your time today. Cherise Stein is with Tariffic.

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